Prof. Augusto B. Agosto
Cebu City
Land is an important source of wealth for a nation. Everything that we use can be traced ultimately to land. In economics, land is one of the factors of production. Land serves also as a commodity, it can be bought or sold. Due to its value, there are different laws that ensure real estate transactions are properly performed and recorded. The land also can be passed on to family members through estate planning, or maybe owned by one or more people. In governance, the State and local government regulates the use and purpose of the land, it must be in accordance with the zoning and the construction will not damage the surrounding environment.
The Philippine Constitution enshrined the basic concepts and principles of land and real estate laws. It recognizes the ownership of the State over lands, natural resources, and minerals within its territory and jurisdiction. Several laws had been passed and implemented also which directly affect property and real estate management. Local laws especially the Local Government Code defined the powers of local government units in reclassifying lands and craft land use planning through Comprehensive Land Use Plan and Zoning Ordinance, Schedule of Assessment, and other related laws.
This study will attempt to analyze the major points of these laws and provide insight into their governance and management, actual cases, and conflict with other laws. Finally, the study will recommend some points on the improvement of its governance.
I. Basic Concepts and Principles in Land and Property Law
In studying the land laws of the country, it is important to define first the territory in which the property or land comprises. We should have primary knowledge of the scope of the territory on which any laws will be applied and implemented. In Article I of the National Territory provision, it is stated that the territory comprises the Philippine Archipelago, including all the islands and waters embraced therein. This provision is important in studying the different laws of the land. We can only start and process the titling of land which are situated or part of this territory. Furthermore, what is subject to titling are only those lands, including its terrestrial and aerial domains. Not included are the waters, fluvial and submarine areas.
In Article XII, Section 2, Paragraph 1 of the 1987 Constitution also stated that all lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, fisheries, forests or timber, wildlife and flora and fauna and other natural resources are owned by the State. All of these natural resources should not be alienated except agricultural lands. This is what we call the Regalian doctrine.
There are specific laws regarding the Property Rights of Indigenous People that declares ancestral lands and domain as never to have been public land and are private. (Cruz v. Secretary, 347 SCRA 128)
Furthermore, those alienated or transferred to private individuals are subject to the police power of the State including the power of an eminent domain, and taxation. In this provision, the constitution clearly states the citizenship requirement and that only Filipino citizens where the State can forge a joint venture or production-sharing agreement. If a corporation or association, it should be sixty percent controlled by Filipino citizens.
in Section 1, Article XIII of the 1935 Constitution, agricultural lands include residential, commercial, and industrial lands. The Constitution state that natural resources, with the exception of public agricultural land, shall not be alienated, and with respect to public agricultural lands, their alienation is limited to Filipino Citizens. But the purpose is to conserve agricultural resources in the hands of Filipino citizens.
Furthermore, Section 3, Article XII of the 1987 Constitution emphasized that lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. What we are calling agricultural lands are currently subdivided into residential, commercial, industrial, institutional, and other uses.
The basic law of the land also provides that the private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant. Outside of this provision, Congress will determine, by law, the size of the land that will be acquired, held, or leased and lay down considerations on this matter.
Property can be either public dominion or privately owned. Public dominion, under Article 419-423 of the New Civil Code, refers to those intended for public use such as roads, canals, rivers, ports, and bridges constructed by the State, banks, shores, and others intended for public service or for the development of the national wealth. Other properties which are not intended for public use will form part of the patrimonial property of the State. Private properties are those owned by the individual or collectively through a corporation or association.
Land Titling and Registration
The Philippines is using the Torrens System in land registration. Land registration is important to secure owners from any threat of land-grabbing, or other intentions. Torrens title serves as proof of ownership but not the sole proof. Under the mirror principle in Torrens System, the title of the property reflects the property, free of any adverse claims. Anything that happens on the land should be found in the title i.e. adverse claims, liens, and any encumbrances. The title will show the world the ownership and claims that an interested party would want the world to know such as mortgages, caveats, liens, and adverse claims can be found in the title. However, not all can be seen in the title itself. There are limitations and restrictions imposed by the State through its police power, expropriation, zoning, height limitations, and area consideration.
Torrens system also considers the curtain principle which assumes that the face of the title is sufficient and there is no reason to look for the past. However, if there is doubt anyone can lift the curtain and look for the trace back up to the mother title. This is what we call due diligence in real estate parlance.
The other law in land registration is the Property Registration Decree (PD No. 1529). This law simplifies the registration of lands under the Torrens system and the unregistered lands. This decree was issued to integrate various laws that pertain to the registration of property. Incorporated in this law are the following laws: Act 49 or the Land Registration Act, CA 141, the Public Land Act, Act 2259, or the Cadastral Act, Presidential Decree 27, the Emancipation Patent Law, and other laws. It also created the Land Registration Authority as the central repository of records of original registration, subdivision, and consolidation plans of titled lands.
The Commonwealth Act No. 141 or the Public Land Act, it gives the President the authority to classify the public domain into alienable and disposable lands. It also authorizes the President to declare what lands are open to disposition or concession. Under Art.712 of the New Civil Code, the modes of acquiring ownership by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and by tradition and prescriptions.
For the purpose of land registration, Indigenous People’s Rights Act (IPRA) specified that there is no need to secure separate certification that ancestral land is alienable and disposable. The process of identification, delineation, and certification as ancestral land will suffice. Unlike regular registration proceedings where the applicant must prove possession of the land since June 12, 1945, as well as the classification of alienable and disposable land. IPRA already classified ancestral lands as alienable and disposable even if it has a slope of 18% or over. This provision of law will contradict, other laws that set 18% and above as non-alienable and disposable such as Presidential Decree 705 or the Forestry Code under Section 15, which states that no land of the public domain eighteen percent (18%) in slope or over shall be classified as alienable and disposable, nor any forest land fifty percent (50%) in slope or over, as grazing land.
Ownership
Under the Civil Code of the Philippines, Chapter 1 Art.427-430, ownership may be exercised over things or rights. Under the bundle of rights concept, the property owner is compared to a bundle of sticks. The owner has the right to enjoy and dispose of a thing, the right to recover and to exclude any person. Thus an owner can “fence” his/her property without detriment to others. Ownership also includes all of its surface and everything under it, and he can construct whatever improvement he deems proper.
Under Section 2 of the Code, Art.445-450, the law states that whatever is built, planted, or sown on the land of another and the improvements on it, belong to the owner of the land. Thus whenever there are properties that are inhabited by informal settlers, can be attributed to the owner of the land under this provision.
However, there are limitations imposed on the rights of ownership. These limitations can be grouped, either imposed by the state in the exercise of its inherent powers; or by specific provisions of the law; by the transferor of the property and by the owner; and inherent to the property.
There are two types of estates in land: one is freehold hold which indicates the title of ownership, and the other one is leasehold estate which signifies some sort of right sort of fee simple of title. Under the general limitations, the State uses the three inherent powers of the state such as police power, eminent domain, and taxation. Limitations imposed by law are legal easements such as zoning regulation, building codes, rent control, subdivision regulations, and escheat. Limitations imposed by the owner himself such as voluntary servitudes, mortgages, leases, and deed restrictions. There are also limitations imposed by the transferor such as donations and usufruct, while the inherent limitation is co-ownership.
Article 476 and 478 of the Civil Code state that “whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but it is in truth and in fact invalid, ineffective, voidable or unenforceable, or has been extinguished or has terminated, or has been barred by prescription and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.”
In the absence of a title, a tax declaration coupled with actual possession and the existence of improvement can also substantiate the claim for ownership. Tax receipts and declarations are prima facie proofs of ownership or possession of the property for which such taxes have been paid. Coupled with proof of actual possession of the property, they may become the basis of a claim for ownership.
The Family Code outlines the property regime of spouses. In the absence of a marriage settlement or prenuptial agreement, the provision of the Family Code will apply with regard to the property regime of the spouses. If the marriage was contracted before the Family Code (before 03 August 2988) then the conjugal partnership of gains will govern. However, if the marriage was contracted after August 3,1988, then the absolute community of property will apply. Under the regime of absolute community of property, all property owned by the spouses at the time of the celebration of the marriage or acquired thereafter shall form part of the community property. However, the following shall be excluded in the community property and be considered as an exclusive property of the spouse: That which brought to the marriage as his or her own; acquired during the marriage by gratuitous title; acquired by right of redemption, by barter or by exchange of the property belonging to only one of the spouses; and that which is purchased with the exclusive money of the wife or the husband. Article 92 of the Family Code states that inherited or donated pieces of property acquired during the marriage, as well as the fruits and income, do not form part of the absolute community of property.
In general, Philippine law prohibits foreign ownership of land. This prohibition can be found in the Philippine Constitution and several special laws. Former Filipinos may own land, buildings, and condominiums. Corporations with Filipino nationality can own land provided that the corporation has at least 60% owned by Filipino citizens. Under RA 4726, foreigners may own condominium units as long as not more than 40% of the units in a project were acquired by foreigners.
There are exceptions however on foreign ownership such as those land acquired before the 1935 Constitution; acquisition thru hereditary succession, if the heir is the legal and natural heir; Former natural-born Filipino citizen, under the Batas Pambansa 185 and RA 8179(Foreign Investment Act), can own 1000 square meters of urban land or one hectare of rural land; can own a maximum of 2 lots only; ownership of urban or rural land used for business purposes will lower the 5,000 square meters and 3-hectare limits.
Also, foreign individuals, corporations, or associations may lease land for a period of 25 years renewable for another 25 years. (PD No.471) and lease up to 50 years renewable for another 25 years under the Investor’s Lease Act or RA 7652.
Rights and encumbrances
Under the Civil Code, Art.562 the usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance unless the title constituting it provides. It’s the right of others to enjoy the fruit of the immovable property for a certain period of time. The rights and obligations of the usufructuary include his entitlement to all-natural, industrial and civil fruits of the property of usufruct. However, in the usufruct arrangement the owner is obliged to reimburse at the termination of the usufruct from the proceeds of the fruits, all other expenses including cultivation, ordinary expenses, and others.
We also have common ownership that pertains to the property that is not subdivided yet due to different problems. Both of the co-owners are entitled to the fruits of the property.
An easement is an encumbrance imposed upon an immovable for the benefit of another immovable belonging for another owner. Easement of way is a form of encumbrance, it will benefit others to use another property. For example, if a landowner, owns a lot that is landlocked will need to pass along another property to access a public road. If there will be no easement, there is a probability that the landlocked owner or whoever from his family will trespass on the property of the servient property.
Under the Civil Code, there are different types of easement, it can be a legal easement or voluntary easement. The former was established by law while the latter was by the will of the owners. There are different types of easements such as easements of road right of way; easements from water bodies as stated in the Water Code of the Philippines; Easement under the Highway Act and the easement from corregidor right of way of transmission lines, electricity utilities and many more.
Eminent domain
The power of eminent domain is the most controversial nowadays. Under the build, build, build program of the Duterte administration, there are road widening and construction in different parts of the country. Eminent domain or expropriation is the taking of private property by the government for public use. Under the law, the government can take the property of others and pay compensation thru different modes of payment, and in market value. In practice, even the local government is doing expropriation for the purpose of its project. However, there are cases of long and delayed payments that eventually negate the owner of the “just” compensation.
A case in point is my client in appraisal which the local government expropriated their lands for the construction of a new access road. The landowner has been offered payment that is equivalent to the amount they have declared in the tax declaration. The court process of solving the problem takes time which gives the owner more sleepless nights and languishes in fear of underpayment.
Land use
There are other issues that give limitations to the ownership. In the Republic Act 7160 or the Local Government Code of 1991, Section 447-448, states that land use planning at the local level has been strengthened under the principle of subsidiarity. It means that local governments gain responsibilities in a variety of planning fields, including development and land use planning. The Sangguniang Panglunsod will prescribe necessary limits and restraints on the use of the property within the jurisdiction of the city; adopt a Comprehensive Land Use Plan; reclassify lands within the jurisdiction of the City or Municipality and enact Zoning Ordinances.
Also, under Executive Order 71, the approval and process of subdivision plans have been devolved to the local government units. The such function has been held by the Housing and Land Use Regulatory Board.
Property Taxation
In general, there are two levels of taxation on real property. One is the national level such as capital gains, documentary stamp, donor tax, transfer tax, and estate tax. The other one is the local level which includes real property taxes (RPT), idle land tax, and others. For most LGUs, the tax on the ownership of real property is the most significant internal source of revenue. From 2003-2007, the basic RPT together with SEF accounted for 49% of total tax revenues. All taxes on real property, taken together, accounted for 52 % of LGU tax revenues. Business taxes accounted for only 39% of LGU tax revenue (Gomez, 2010).
Property valuation on the local level is market-based, as per the Local Government Code. However, in practice, the schedule of market value is very low in comparison to the market value provided by the Independent Property Appraisers.
Art.6.Sec.28 (3) of the Philippine Constitution states that exempted in taxation are the charitable institutions, churches and personages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements, actually, directly, and exclusively used for religious, charitable, or educational purposes. This provision only shows that in terms of taxation, lands and improvements were differentiated not on its type of use but with the type of owner who uses it for religious, charitable or educational purposes.
A corporation sole which consists of one person only, is vested and holds real estate and registers the same in trust for the faithful society or church for which the corporation was organized. It may acquire and register private agricultural land. A corporation sole is not an ordinary private corporation acquiring public agricultural lands. The reason for this is that the corporation sole has no nationality.
II. Governance of Land & Real Property in the Philippines
Land plays a great role in national development. Good governance of land and real property will help in the social, economic, and ecological development of a society. It is a prerequisite for economic progress, social stability, and sustainable development.
Currently, the country has a total land area of 30 million hectares, 51 percent of which are considered forest lands, 47 percent are classified as alienable and disposable lands and about 2 percent are unclassified lands. It is estimated that there are about 24.2 million parcels within alienable and disposable lands with 13.1 million parcels already titled and 11.1 million parcels untitled (DENR-LAMP, 2004a). Moreover, most of the forest lands in the Philippines are occupied and used by people without secure rights, while Metro Manila alone is home to some 4 million informal settlers (Teh, 2005).
Public Land Classification
In Section 3, Article XII of the 1987 Constitution, lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands.
Under RA 10023 or the Free Patent Act, an amendment to Public Land Act or Commonwealth Act 141, aims to ease the requirements and procedures in the titling of residential lands. A person qualified to avail of this should proceed to the Department of Environment and Natural Resource and no need for a judicial process. Under this law, only unregistered lands, alienable and not needed for public use may be subject to free patent.
However, Congress can convert lands of the public domain into alienable and disposable. The local government units under the Local Government Code of 1990 provide power to the Sanggunian to reclassify agricultural use to other uses such as commercial, residential, industrial, or institutional.
The enactment into law of the National Integrated Protected Areas System Act of 1992 (RA 7586) aims to secure for the Filipino people of present and future generations the perpetual existence of all native plants and animals through the establishment of integrated protected areas within the classification of the national park under the Philippine Constitution. It provides for the establishment of a protected management board that will manage and ensure that the use and enjoyment of protected areas will be consistent with the principles of biological diversity and sustainable development.
Public Land Disposition
Public lands classified as agricultural shall be disposed of under any of the following modes: (a) by homestead; (b) by special grant; (c) by sale; (d) by lease; and (e) by confirmation of imperfect or incomplete title by judicial legalization or administrative confirmation (Free Patent). The different types of titles that will be issued are the following: Original certificate of Title for patents; Certificates of land ownership award for Agrarian Reform Beneficiaries; Certificates of Ancestral Domain Title for ancestral lands; and Transfer Certificates of title for subsequent transactions.
Land Titling
In the Philippines, there are two systems of registration of land titles and deeds- the Torrens system and the system of recording unregistered lands. Under the Torrens system of registration, the right acquired by the registration is guaranteed by the government for which purpose there is provided an assurance fund which is made available to pay for damages that may be suffered by the registrants as a consequence of the operation of the land registration Act. A Torrens title is conclusive to the whole world, including the government, and to a holder in good faith and guaranteed as indefeasible, unassailable, and imprescriptible. The other system is the recording of unregistered land governed under Act 3344 or the law that provides for the registration or recording of transactions affecting unregistered lands.
The title can be obtained either by administrative or judicial process. Any person who is qualified to own property may go to court or different administrative government agencies to secure a title. But the process is a complex one, from the transaction where buyers and sellers agreed to start the process of transferring title will have to pass numerous processes from the local government to the BIR, then the Register of Deeds, and lastly back to the local government particular the Assessor’s Office and Treasury.
The fundamental policy of preserving the nation’s lands for Filipino citizens. Thus, as the rule now stands, the fundamental law explicitly prohibits non-Filipinos from acquiring or holding title to private lands, except only by way of legal succession or if the acquisition was made by a former natural-born citizen.
A natural-born Filipino citizen who has lost his citizenship may be a transferee of private land(see Citizenship Requirement Individual under Roman Numeral II-B[ix], Section 10 of Foreign Investment Act)
While aliens are disqualified from acquiring lands, they may lease private lands for a reasonable period or if they will be granted Philippine citizenship. However, under Republic Act 4726 or the condominium law, foreign nationals can own a condominium unit or townhouses or shares. Under this setup, the ownership of the land is owned by the condominium corporation where the majority of its owner, or 60% is controlled by Filipino citizens.
In Republic Act No. 6732 it allows the administrative reconstitution of original copies of certificates of titles lost or destroyed due to fire, flood, and other force majeure, if at least ten percent (10%) of the total number of certificates of titles in the possession of the Office of the Register of Deeds, and no less than five hundred (500) certificates of titles, were lost or damaged. Through this law, there is no need for a judicial order for the reconstitution of the title on which the previous practice is one of the requirements.
Land Tenure
In the Philippines, lands are either public domain or privately owned. The Public Land Act and other special laws grant patents either homestead, sales, or free patents. Under the Comprehensive Agrarian Reform Law, the tenant beneficiaries are granted full ownership in the form of emancipation patents or conditional ownership in the form of Certificates of Land Transfer or CLOA. There are leases and usufruct as tenure in the holding and acquisition of Public lands. The former, under the Philippine Constitution, can be leased up to 1000 hectares to private corporations or 12 hectares to individuals. The latter is applicable only to forest lands, natural parks, or other public domains.
Under the Indigenous People’s Right Act customary rights over ancestral lands are recognized. Rural migration led to the rise of informal settlements on public land and other idle lands in the cities. The latter is protected under the Urban Development Housing Act or UDHA from evictions and demolitions. However, no security of tenure on their existence in the informal settlement.
Land Registration
Titles and deeds are both registered in different branches across the country through the Land Registration Authority, which is the agency of the government under the Department of Justice. The former is responsible for issuing decrees of registration and certificates of title and register documents, patents, and other land transactions for the landowners, agrarian reform beneficiaries, and the public in general. However, the process of registration in this agency is very slow. It takes weeks to months in processing the transfer of title.
Relevant Land and Property Laws
There are relevant land and property laws that protect and ensure the continued development and use that will serve the economic growth of the country.
Republic Act 10884 or An Act Strengthening the Balanced Housing Development Program which amends the Republic Act 7279 or the Urban Development Housing Act. The former enables the developers of subdivisions and condominiums to allot 15% of gross revenue for the socialized housing programs. It also mandates other options for compliance with the balance housing program.
Presidential Decree No.957 or the Subdivision and Condominium Buyer’s Protective Decree regulates the sale of subdivision lots and condominiums.
Batas Pambansa 220 – is an act authorizing the Ministry of Human Settlements to establish and promulgate different levels of standards and technical requirements for economic and socialized housing projects in urban and rural areas.
Republic Act 9646 – or the Real Estate Service Act regulates the practice of Real Estate Service in the Philippines, creating a professional regulatory board for real estate service. It also embodies the importance of continuing programs of education for the practitioners.
Republic Act 8435 or the Agriculture and Fisheries Modernization Act of 1997 provides for the identification of Strategic Agriculture and Fisheries Development Zones (SAFDZ) within the network of protected areas for agricultural and agro-industrial development to ensure that lands are efficiently and sustainably utilized for food and non-food production and agro-industrialization.
Presidential Decree No 1216 defines “Open Space” in a residential subdivision and amends Sec.31 of PD 957 requiring owners to provide roads, alleys, and sidewalks and reserve open space for parks or recreational use.
Republic Act 7279 or the Urban Development and Housing Act provide for a comprehensive and continuing urban development and housing program.
The provisions of Section 23 of Presidential Decree (PD) No. 178 also known as the Revised Philippine Highway Act which prohibits the use of road right-of-way for temporary and permanent structures such as buildings, houses, shanties, stores, shops, stalls, sheds, canopies, and billboards.
Based on P.D. No. 1096, the 1977 National Building Code of the Philippines (NBCP) and its 2004 Revised implementing rules and regulations (IRR), the following rules apply:
1) front setback for a R-1 dwelling MUST be 4.5 meters (m) deep, and the two (2) side setbacks and the rear setback shall be at 2.0 m deep each.
Republic Act No. 10752, also known as “The Right-of-Way Act,” aims to facilitate the acquisition of right-of-way (ROW) sites for government infrastructure projects.
Republic Act 7916 or the Special Economic Zone Act, the law created the Philippine Economic Zone Authority that will manage and operate public economic zones, and regulate private-economic zones. It provides incentives to those who opt to locate within the economic zones.
Republic Act No. 9353 or An Act Declaring a National Policy for Tourism as an engine of Investment, employment, growth, and national development. The law provides for the creation of the Tourism Infrastructure Enterprise Zone Authority. The TIEZA will designate Tourism Economic Zones and like PEZA, it will provide incentives to qualified TEZ. Lands identified as part of TEZ shall qualify for exemption under the Urban Development and Housing Act and the Comprehensive Agrarian Reform Law, subject to rules made by Tieza and the Housing and Urban Development Coordinating Council and the Department of Agrarian Reform.
Republic Act No. 10816 or the Farm Tourism Development Act of the Philippines. The law aims to attract visitors and tourists to farm areas for production, educational and recreational purposes.
Republic Act 10066 or the National Cultural Heritage Act is a law, or Republic Act, of the Republic of the Philippines. It created the Philippine Registry of Cultural Property and took other steps to preserve historic buildings that are over 50 years old.
Republic Act 11213 or the Estate Tax Amnesty Program. It’s a law that provides a 6% estate tax based on the net estate. The amnesty period is 2 years from the time the implementing rules and regulations become effective.
Republic Act 11201, consolidates the Housing and Urban Development Coordinating Council (HUDCC) and the Housing and Land Use Regulatory Board (HLURB).
Long way to go: Issues and Prospects in Land and property legislation
Based on the study The Philippines lags behind its Asian neighbors in terms of land administration and management. (Limbo, 2017) According to the study of the House of Representatives, the inefficiency of land administration provides a disincentive to investments in the land market because of the high transaction cost in transferring and registering property rights. The absence of computerization will continue the slow process of registration and the potential to create problems for the ownership of the property.
Still, land use planning in major cities has been ineffective in controlling the direction and intensity of urban development. There are also variance provisions in the zoning ordinances that wantonly give leeway to developers in constructing non-conforming uses in different cities. As a result, major cities in the Philippines face uncontrolled urban expansion, with services not being able to keep pace with demands. LGUs should be more proactive in urban planning, making sound projections on directions, scope and extent of urban growth so that services and infrastructures can be projected in advance.
Land use restrictions on ownership, use, easement, and eminent domain have a bigger impact on real estate valuation. Unplanned communities will definitely get a lower value due to location and neighborhood comfortability. On the other side, local government units have not taken advantage of land use planning as a mechanism to determine the urban form and anticipate changes in demand for other uses of land. Generally, a series of infrastructure projects by government agencies coupled with private sector projects will create changes in land use. Resulting in uncontrolled growth and direction of urban development. At the local level, market-based valuation is provided under the Local Government Code, however, very few of the municipalities have a new or updated Schedule of Assessment. It resulted in lost opportunities and lost revenues from property taxes which can hasten the sourcing of funds to finance local development projects.
Based on the study of the Local Governance Assessment Framework (LGAP, 2013) they have found that a large number of urban/residential and rural properties are still untitled. It is estimated that approximately 11 million parcels in the Philippines have not been issued titles.
However, the completion of the Cadastral survey of 1,634 cities and municipalities it will help and provide an opportunity to solve the problem. It is a big achievement, not to mention that cadastral survey have started in 1913. It will help cities and municipalities in determining the boundaries and jurisdiction and will help individual owners in processing and registering properties with the LRA.
Having different valuation methodologies in private and public practice is chaotic. It will create a credibility question on the true worth of a property. It is worth knowing that there are two major bills that have been submitted to Congress as a result of LAMP’s work: the Land Administration Reforms Act (LARA) and the Property Valuations Reform Act (VRA). These were meant to address the systematic constraints affecting service delivery in land administration; and in the adoption of market-based valuation of properties by the local government units.
Our land governance and management system has been a decade old, and not yet a perfect one. Reforming the same will take not just a short period, but a long way to go.#
Real LexEcon 